On yer bike!

Everywhere you look you can’t help but notice the latest push for everyone to consider the environment and their own carbon-footprint. Environmentalists throughout the world are telling us that unless we take action now to save our planet there won’t be a planet left for our children. The drivers amongst us are all too aware that a litre of petrol has now passed the one pound mark and you would have to be living in a fuel’s paradise not to appreciate that oil is a finite resource. So why not try and do something to help by getting a push bike?

In 1999 the Finance Act introduced tax incentives for employers to provide employees with bicycles and accessories as a tax-free benefit. The exemption applies so long as bicycles are used, at least in part, for your journey to and from work. The Cycle to Work scheme is part of the Government’s initiative to promote healthier transport and reduce pollution. What could be healthier than cycling to work? It’s a great way to get some exercise and do your bit for our planet. It also avoids all the hassle of city parking and filling the parking meter with change.

Employees taking advantage of the scheme will save up to 50% of the retail purchase price of their chosen bicycle. You can opt for the salary sacrifice scheme and payment of the bicycle is by way of deductions to gross pay. This provides tax and national insurance savings for the employee and national insurance savings for the employer too.

But don’t forget the safety issues when using your bike. As a personal injury lawyer, I have to say helmets are a must but they only provide protection if they are sized and fitted correctly. If you are unfortunate enough to have a collision you should get your helmet replaced, even if it was just a minor blow. If you are uncertain about your cycling skills then get some practice in first away from busy city streets.

It’s also worth investing in some high visibility kit which can also be purchased under the scheme. You don’t want to find yourself in the position of Mrs Read, the 80 year old cyclist in the case of Read v Edmed. Mrs Read was straddling a `give-way’ line when she was knocked off her bike by Mr Edmund. It was a cold morning and unfortunately Mr Edmund had failed to clear his windscreen before driving off and had hi head out of his side window to get a better view of the road!

If you want to reduce your own carbon footprint and get some exercise into the bargain the Bike to Work scheme could be just for you .

Find out more about the Bike to Work scheme by calling Samantha Robson of Slee Blackwell Solicitors, Exeter on 01392 423000

IS ALISTAIR THE DARLING OF IHT?

In his October Pre-Budget Release the Chancellor, Alistair Darling, proposed a significant change in Inheritance Tax (“IHT”) relief, applicable only to married couples and civil partners (“spouses”).

As matters stand, each individual spouse has the benefit of a “Nil Rate Band”. In other words a part of their net estate, currently £300,000, is not chargeable to IHT. Any property above that threshold is subject to IHT unless exemptions or reliefs apply. Transfers of property between spouses are generally exempt from the payment of IHT however. This effectively means that if one spouse leaves their entire estate to their surviving spouse, they have “wasted” their Nil Rate Band and lost the opportunity to save £120,000 of IHT as at today’s rates. As a result of this, spouses have resorted to taking various IHT planning measures when making their Wills. These measures invariably involve leaving property up to the value of the Nil Rate Band at the date of death to someone other than the surviving spouse. For instance, it might be an outright gift to the ultimate beneficiaries, who are usually the couple’s children. There are risks attached to many of these tax-planning strategies. In particular, the surviving spouse loses control of that proportion of the estate and it leaves them financially vulnerable in their old age.

Although the finer details of the Chancellor’s proposals are not yet clear, it appears that in principle what he is proposing is that any proportion of the Nil Rate Band that was not used by the first spouse to die can now be used when the surviving spouse dies. In other words there is the potential to “double-up” the Nil Rate Band when the surviving spouse dies. Furthermore, it appears that in terms of value the “double-up” will be of the later (and therefore higher) Nil Rate Band applicable at the second death.

With soaring house prices over recent years, this is excellent news for the numerous couples who are only affected by IHT because they have most of their wealth tied up in their home.

But before we uncork the champagne it is important to stress that these are simply outline proposals. Cynics might say that this is just a headline-grabbing attempt to deflect attention away from the Conservative’s proposal to raise the Nil Rate Band to £1,000,000. It will be interesting to see if the Chancellor is still our darling when these proposals are firmed up next Spring in his Budget and, more importantly, when the Finance Act 2008 adds the real flesh to the bones.